A new algorithm, using the Moderate Resolution Imaging Spectroradiometer (MODIS) satellite reflectance and aerosol single scattering properties simulated from a chemistry transport model (GEOS-Chem), is developed to retrieve aerosol optical thickness (AOT) over land in China during the spring dust season. The algorithm first uses a “dynamic lower envelope” approach to sample the MODIS dark-pixel reflectance data in low AOT conditions, to derive the local surface visible (0.65 μm)/near infrared (NIR, 2.1 μm) reflectance ratio. Joint retrievals of AOT at 0.65 μm and surface reflectance at 2.1 μm are then performed, based on the time, location, and spectral-dependent single scattering properties of the dusty atmosphere as simulated by the GEOS-Chem. A linearized vector radiative transfer model (VLIDORT) that simultaneously computes the top-of-atmosphere reflectance and its Jacobian with respect to AOT, is used in the forward component of the inversion of MODIS reflectance to AOT. Comparison of retrieved AOT results in April and May of 2008 with AERONET observations shows a strong correlation (R = 0.83), with small bias (0.01), and small RMSE (0.17); the figures are a substantial improvement over corresponding values obtained with the MODIS Collection 5 AOT algorithm for the same study region and time period. The small bias is partially due to the consideration of dust effect at 2.1 μm channel, without which the bias is − 0.05. The surface PM10 (particulate matter with diameter less than 10 μm) concentrations derived using this improved AOT retrieval show better agreement with ground observations than those derived from GEOS-Chem simulations alone, or those inferred from the MODIS Collection 5 AOT. This study underscores the value of using satellite reflectance to improve the air quality modeling and monitoring.